Unemployment is rising day by day, and incomes of families have gone down considerably. Inflation rates are higher due to which prices have been out of control. As a result, everyone is looking to streamline their budget and cut down on some expenses. Given these issues, you may have thought about cancelling your term insurance to save some money. However, before taking such a step, remember that life is full of uncertainties. In case of any unfortunate eventualities, term insurance is the perfect instrument to take care of the financial needs of your family.
Term insurance must be a crucial part of your financial plan. Here are some reasons why you should not cancel your term insurance at any cost.
1. You need to take care of your family’s financial needs
If you are the sole breadwinner of your family, your loved ones depend on your income for all their needs. In this fast-paced world, eventualities can wreak havoc with your finances. In the case of your death, your family may be forced to compromise on their needs. But with term insurance, your loved ones can have a safe and secure future. Such term insurance plans can work as a replacement for your income. Hence, cancelling it can deprive your family members of financial freedom.
2. You will miss out on tax benefits
According to Section 80C of the Income Tax Act of 1961, insurance premiums qualify for tax deductions. The premium paid towards your term insurance plan can provide you tax benefits up to ₹1.5 lakhs a year. Thus, term plans not only secure the future of your family but also help you to save tax along the way. You will no longer be able to claim these deductions if you terminate your term insurance policy.
3. You will have to pay more for new insurance
Many people cancel their term insurance, thinking that they will purchase it again in the future. However, this ends up increasing the overall costs. Insurance premiums rise with age. So, if you buy term insurance with the same coverage in the future, it will be costlier than before. With rising premiums, you are likely to struggle more at a later stage. Moreover, if you suffer from an unexpected illness, the insurance company may not accept your application or may offer you a comparatively low coverage.
4. Your family members may not be able to pay your liabilities
Your family members have to deal with liabilities you leave behind in case of your untimely demise. Without the term insurance, they may have to let go of some precious assets to cover up for your debt or loans. Hence, you should aim to keep their interest safeguarded at all times with an active term insurance plan.
Cancellation of your term insurance policy can be a waste of your hard-earned money. Moreover, you may have to pay a much higher amount to buy the same policy later. In this fast-paced world, term insurance has become a necessity. It can help your family members to fulfil their needs. If you terminate your term insurance policy, your family can be left without a financial cushion. Therefore, you should never terminate your term insurance plan.
To know more about term plan, term insurance, long term savings & retirement plan visit PNB MetLife website.
The aforesaid article presents the view of an independent writer who is an expert on financial and insurance matters. PNB MetLife India Insurance Co. Ltd. doesn’t influence or support views of the writer of the article in any way. The article is informative in nature and PNB MetLife and/ or the writer of the article shall not be responsible for any direct/ indirect loss or liability or medical complications incurred by the reader for taking any decisions based on the contents and information given in article. Please consult your financial advisor/ insurance advisor/ health advisor before making any decision.
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